7.25% Yes Bank FD + Covid-19 Insurance Scheme – Should you invest?

A couple of days back, Yes Bank has launched a new FD scheme where one can get 7.25% interest rate along with covid-19 insurance cover. When banks and post offices are offering lower interest rates between 5% to 6.5%, higher interest rates from Yes Bank FD Scheme would definitely attract investors. What are the issue details of Yes Bank FD + Covid-19 insurance Scheme? Are there any hidden factors in this Yes Bank FD scheme? Should you invest in Yes Bank FD + Covid-19 Insurance Scheme?. This post is based on request from Arpitha Reddy on “Suggest a topic” to cover this topic.

Yes Bank in collaboration with Reliance General Insurance has launched FD scheme that offers the Covid-19 insurance cover scheme. One need to invest Rs 1 Lakh for more than 1 year FD Tenure to get this free insurance. This way there are a few terms and conditions in this FD cum insurance scheme.

Yes Bank FD + Covid-19 insurance scheme Issue details

Here are the FD cum insurance scheme details.

1) Yes Bank is offering this FD scheme where the FD tenure should be more than 1 year.

2) Yes Bank FD interest rate for this scheme is 7.25% per annum. One should note that though it offers 7% for 1 year, this scheme does not apply. You need to check for FD scheme that offers 7.25% for you to be eligible for this offer.

3) Minimum investment of the FD is Rs 1 Lakh. There is no maximum limit in this Yes Bank FD scheme.

4) Investors who are investing Rs 1 Lakh and above in this FD is eligible to get FREE covid-19 insurance coverage.

5) This FD + Covid-19 insurance plan scheme is only for new FD investors. It would not apply to the existing FD holders of Yes Bank.

7) Under the insurance coverage, Yes Bank FD investors would cover covid-19 expenses for Rs 25,000 for 1 year if they are tested positive free of cost.

8) If FD investors are tested positive, they can claim 100% of the covid-19 insurance cover from Reliance General Insurance.

9) Customer can get only one insurance coverage even if they open multiple FD’s above Rs 1 Lakh in Yes Bank.

10) FD investors who are Indian residents and in the age group of 3 months to 60 years are eligible for this FD+Covid 19 scheme from Yes Bank.

How to open Yes Bank FD + Covid-19 Insurance Scheme?

If you are in the age group of 3 months to 60 years and willing to invest a minimum of Rs 1 Lakh for above 1 year, you can apply for this scheme. You need to open this FD online on Yes Bank portal or reach to Yes Bank branch to apply for this scheme.

Would I get some insurance document for this?

This is a basic thing you might want to know. When you open Yes Bank FD + Covid-19 insurance scheme, either online or offline (by visiting branch), while you get your FD receipt, you would also get an insurance certificate. This would have details of 1 year insurance coverage, covid-19 expenses assurance for Rs 25,000 in case you test positive etc.

Reasons to invest in Yes Bank FD + Covid-19 insurance scheme

Here are some reasons to invest

1) This FD provides high interest rate of 7.25% for the 1+ year scheme. Currently banks are offering 5% to 6.5% interest rates, hence such high interest rate FD Scheme would attract customers.

2) One would get covid-19 insurance coverage free with this FD scheme. This covid-19 insurance covers Rs 25,000 where one can claim if they test positive.

Reasons NOT to invest in Yes Bank FD + Covid-19 insurance scheme

Here are some of the negative factors:

1) Yes Bank crisis created turbulence in Indian Banking industry few months back. Slowly investors are loosing trust among some of these banks.

2) Yes Bank deposits have fallen by 56% before and after the crisis. While there was bail-out package by SBI consortium, customers are still worried about the safety of the Yes Bank Fixed Deposits.

Yes Bank FD + Covid-19 insurance scheme is good as it offers the highest interest rate of 7.25% per annum and free insurance coverage for covid-19. However, one should not forget Yes Bank crisis that emerged few months back. Though SBI consortium has bailed out and invested in Yes Bank, one should be careful and watch how the bank would perform in the coming quarters. While there is deposit insurance upto Rs 5 Lakhs, I would personally would not put my money at risk in such high risk FD scheme and wait for deposit insurance to claim if something happens. I would first avoid such banks in my investment portfolio at least for the next few quarters.

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I have done my Post Graduation in Finance. I have over 20 years of experience in analyzing various investment options and money saving ideas. I love doing financial planning, Mutual Fund Analysis, Searching long term Stocks for wealth creation, IPO Reviews, Analyzing Life Insurance and Health insurance Plans etc.

9 Comments

Jalpesh Patel

Hi Suresh, Thanks for yet another informative article on Yes bank FDs. Do you know if the deposit insurance cover of Rs 5 Lakhs offered by DICGC is also valid for NRIs that open NRE FDs with a bank branch located in India? With Best Regards, Jalpesh Patel

Jalpesh Patel

Hi Suresh,
Thanks for your helpful & informative articles.
Can you let us know if the deposit insurance of 5 Lakhs provided by DICGC is also
applicable to NRE FDs or is it only applicable to FDs of resident individuals?
With Best Regards,
Jalpesh Patel

Hello Jalpesh, As per DIGCC guidelines, all fixed deposits done in banks in India are insured under DIGCC. It means it includes NRI FD’s too. However, one should note that if any of the Indian Banks have branches outside India, FD’s under such foreign country branches are not covered as the deposits are not done in India branches of that bank.

Sivaraman

Good Question. 1) So, you want to invest your FD knowing there is risk 2) If something happens to such bank, you want to take heart-burn for few months 3) If you are in urgent need of money, you might not get money when you need it and you are okay 3) If insurance company pays you after 1 year (just as example), you are still okay.

KrishnaMurthy

Yes bank FD offer for covid19 insurance coverage may not be beneficial due to following reasons. Age limit is 60 yrs for coverage,below 60 it is very rare to effect as such there will be no claims arise at all,if even claim arises claim is limited to Rs25000/- whereas cost is any where between 2.5 to 3.5 lakhs as govt estimate. If coverage is extended above 60yrs,it will be good.